Scroll’s zkEVM Launches on Ethereum Mainnet

Korea Exchange sets the stage for security token tradingStarting next year, South Koreans may have the opportunity to trade security tokens, as the Korea Exchange (KRX), the sole securities exchange operator in the country, has officially begun preparations to establish a security token market. The Busan Digital Asset Exchange (BDX), slated for launch next year, is expected to play a pivotal role in spearheading the growth and development of this emerging security token market.Photo by Tierra Mallorca on UnsplashSeeking approval from financial regulatorsAs reported by local news outlet Busan Ilbo, KRX applied to the FSC last month for registration as an innovative financial service under the financial regulatory sandbox scheme. On Nov. 19, the FSC approved the creation of pilot markets for investment contract securities and non-cash trust beneficial certificates. KRX’s recent initiative is a follow-up to this development. The financial regulator is set to make a final decision after holding a main committee meeting to review KRX’s application.Investment contract securities and non-cash trust beneficial certificates represent two distinct types of security tokens. Investment contract securities provide a means for fractional investments in real-world assets (RWAs). This can include a diverse range of assets such as artworks, music copyrights, beef and carbon credits, allowing investors to own a portion of these assets. On the other hand, non-cash trust beneficial certificates function as secondary investment instruments. These certificates enable individuals to invest in financial products that themselves have invested in security tokens, offering an indirect pathway to participate in the security token market.Fractional investments on the horizonVarious industries are poised to benefit from the emerging digital market, especially platforms focused on fractional investment in artworks. Companies like Yeolmae Company, Art Together and Seoul Auction Blue are keen on this opportunity and have applied to the FSS for permission to register security tokens. Upon receiving regulatory approval, these platforms plan to accept subscription requests, enabling investors to participate in the art market in a more accessible way.The development of security token markets is expected to positively impact BDX, which is currently seeking an operator. Initially, when BDX’s operation plan was unveiled in September, it excluded security tokens due to regulatory constraints. However, with KRX now involved, it’s more probable that the Busan exchange will feature security tokens as major trading assets. Experts believe the success of these token exchanges will largely depend on the quality and appeal of the underlying assets.A local securities industry official emphasized the significant role of the security token market in enhancing the stature of Busan as a blockchain hub. The growth of this market is seen as pivotal in boosting the value and utility of BDX. The official noted that BDX’s appeal to investors would increase if it offered a diverse range of underlying assets or unique security tokens. This development could mark a significant turning point for Busan in the blockchain industry.

Japan’s New Tax Amendment Sparks Optimism for Crypto IndustryJapan’s National Tax Agency has recently announced a revision to corporate taxation rules regarding crypto assets, according to a report by local media outlet Coinpost. The amendment states the exemption of companies from taxes on unrealized gains with cryptocurrencies.Photo by Nataliya Vaitkevich on PexelsPrevious tax burden on crypto profitsPreviously, corporate tax at a rate of approximately 30% was imposed on profits from cryptocurrency holdings, including unrealized gains, as per the Japan Times. This regulation has been criticized for burdening companies and impeding innovation in the blockchain industry. In response, some companies had opted to conduct their business operations overseas. However, with the new amendment, the rules have been relaxed for virtual assets issued and held by their companies.Two conditions for tax exemptionThe National Tax Agency clarified the two conditions under which virtual assets issued by a company would be exempt from taxation. Firstly, the crypto asset must have been issued by the company and continuously held since its issuance. Secondly, the virtual asset must have remained under continuous transfer restrictions since its issuance, which can be achieved through either implementing technical measures to prevent the transfer to other parties or holding the assets in a trust that meets specific requirements.This revision in corporate taxation rules is expected to provide relief for businesses in Japan that deal with cryptocurrencies and encourage innovation in the domestic blockchain industry. The relaxation of taxes on unrealized gains may also incentivize companies to keep their operations within the country rather than seeking alternatives abroad.

Mohammed AlKaff AlHashmi, co-founder of the HAQQ Network, has expressed the view that Indonesia has considerable potential to establish itself as Asia’s largest crypto hub. AlHashmi made the comments in a discussion with Crypto.news. HAQQ Network claims to be a scalable proof-of-stake-based blockchain, capable of high throughput. The network is fully compatible and interoperable with Ethereum. The project also focuses on the development of a Sharia-compliant Web3.  While the project is headquartered in Niqa Al Dheeb in the United Arab Emirates (UAE), Indonesia is also a significant market for the company, given that it has just received regulatory approval for the HAQQ Network’s native token from the Indonesia Financial Services Authority (OJK). Islamic Coin (ISLM) is the network’s native token. It is being offered as a Sharia compliant digital currency, with Sharia law being the Islamic legal system that governs the lives of millions of Muslims throughout the world.Photo by Nick Agus Arya on UnsplashGateway marketOffering his thoughts on the Indonesian crypto market, AlHashmi stated: “When we look at Indonesia as a market, I would say it is incomparable. It can be number one to be honest. Because I have seen statistics of growth happening in a very big volume. The volume of trade, transactions and users, I think Indonesia can be very soon one of the top 3 countries in the world.” Indonesia takes on added importance for the HAQQ Network project. The project’s co-founder sees the Southeast Asian nation as a gateway into a broader market given that it has the largest Muslim population in the world. He said that if his project is successful in Indonesia, then there will be no barrier to enter markets in other predominately Muslim nations. The entrepreneur believes that Indonesia is on the cusp of realizing its potential within the crypto sector. He said that Indonesia has a “competitive edge” when compared with other nations. Population size and rapid economic growth feed into that potential, with AlHashmi claiming that Indonesia is primed to become the largest crypto hub in Asia. Smooth regulatory processFrom a regulatory perspective, he also feels that Indonesia is outperforming other jurisdictions. The HAQQ Network project team experienced a smooth process in acquiring regulatory approval for ISLM recently. He believes that although the process was detailed, it was completed quicker than he would expect in other countries.  AlHashmi added that “regulations are flexible enough to enable project owners to do good business to protect the community as well.” Local regulator, the OJK, has expressed an interest in exploring the development of Sharia-compliant crypto assets. Earlier this month, Hasan Fawzi, OJK's executive head overseeing crypto assets supervision, told local media that the regulator is open to advancing Sharia-based cryptocurrencies.  Hasan stated: “Globally and regionally, this is a common practice. It is not unusual to create crypto assets that adhere to Sharia principles.” The OJK executive is particularly interested in tokenization of real-world assets (RWAs). He believes that if this proves to be successful, it could lead to further Sharia-complaint crypto products being launched. The OJK is currently testing tokenized RWAs within a sandbox environment.